India and Global Markets Prepare for the Impact of Trump's Tariff 'Liberation Day'
Donald Trump will announce today his much-vaunted tariffs on all countries. This announcement is sure to cause trepidation amongst countries and markets.
countries. This announcement is sure to cause trepidation amongst countries and markets.
Trump declared April 2, 2019 "Liberation Day", claiming that the new taxes will liberate the United States of its dependence on imported goods.
This is a big story. Here are some points:
1. The US president seemed to expand his US tariffs plans on Sunday by insisting that all countries would be targeted. Trump said to reporters that "you would start with all the countries. Let's see what will happen." He shattered hopes that Trump might reduce some levies, or that they were going to target a selected group of nations. "I've never heard of rumours about 15 countries or 10 or 15. We are talking about all the countries.
2. Trump announced reciprocal tariffs would be "substantially" reduced a day before it was expected to do so. "I believe that many (countries will) drop their April 2 tariffs, because they have unfairly taxed the United States for years. You can see that the European Union has already reduced their car Trump tariffs to 2.5%. This was announced just a few days ago. The US charged a very low tariff. The US only charged a very small amount.
3. The White House had said that India levies a 100% tax on American agricultural goods just hours before. "If you take a look at our unfair trade practices, we get 50% of the European Union's dairy products on American soil. You are paying a 700% tariff on American rice from Japan. India has a 100% tariff on American agricultural products.
4. The US was India's biggest trading partner from 2021-22 until 2023-24. According to a PTI article, the US is responsible for 18% of India's total exports of goods, 6.22 % of its imports and 10.73 % of bilateral trade.
5. India and the US will hold sector-specific discussions in the next few weeks to finalise their proposed bilateral trade agreement. Commerce Minister Piyush Goyal said that the talks are going well and will benefit both countries while protecting India's interest.
